Media

Facebook Short Interest Surges 9% to 25 Million Shares

Trey Thoelcke

Published: March 10, 2021 7:55 am

Facebook Inc. (NASDAQ: FB) may still be at odds with Apple over the tracking of users, but like Google it did make nice with Australia last month over the issue of news aggregation. More recently, the White House is looking to work with Facebook and other social media and tech giants to curb the spread of COVID-19 misinformation.

So how are short sellers feeling about the stock?

The more than 25.02 million Facebook shares short as of February 26, the most recent settlement date, were about 9.4% more than the figure two weeks earlier, as well as the greatest level of short interest since November. The latest figure was also down 17.1% from 30.17 million a year ago. The most recent figure represented about 1.1% of the total float. The 52-week high of about 31 million shares short was seen during last March’s market plunge.

At the average daily volume at the end of the most recent short interest period, it would take more than a day to cover all the short positions.

During the period, Loop Capital hiked its $330 per share target by 12% to $370. That represents over 37% upside from Tuesday’s close. All but three of the 44 analysts surveyed recommend buying shares, with 17 of them rating the stock at Strong Buy. The consensus price target is $338.05.

While one of the ARK Invest exchange-traded funds run by ETF star Cathie Wood sold Facebook shares at the end of last month, another was scooping them up late in February. Specifically, the ARK Next Generation Internet ETF (NYSEARCA: ARKW) parted with over 71,000 shares on the final trading day. However, the ARK Fintech Innovation ETF (NYSEARCA: ARKF) scooped up more than 171,000 shares, including over 74,000 shares in one day.

ARK Invest has been the talk of Wall Street over the past couple of years, outperforming the market and solidifying its place among the big players in the investing world. Founder Wood even has been compared to the likes of Warren Buffett.

Facebook’s share price ended the short interest period almost 5% lower than where it began, and it has struggled to recover since then. Note that the Nasdaq pulled back less than 6% between the most recent settlement dates.

Facebook stock ended Tuesday’s trading at $265.74 a share. That is within a 52-week trading range of $137.10 to $304.67, and it is well below the consensus target price of $338.05. The latest share price is less than 3% lower than at the beginning of the year, while the Nasdaq has gained more than 1% in that time.